Transaction Network Services Inc. this week announced its entry in what is becoming an increasingly crowded market?applications that let smart phones act as credit and debit card acceptance devices. But TNS, which specializes in providing the transaction-transport systems for point-of-sale and ATM networks, says it will set itself apart by helping to bring order to what it sees as a messy business. “We've heard that it's gotten sort of a Wild West feel out there,” Gerry Grealish, vice president of global product marketing, tells Digital Transactions News. In the past year, established players like Intuit Inc., Total System Services Inc., and VeriFone Holdings Inc. have introduced products that allow merchants to process card transactions on mobile phones. Indeed, VeriFone on Thursday announced that Chase Paymentech Solutions LLC will provide merchant accounts for its PayWare Mobile product for smart phones. But the market has also attracted lesser-known entrants, including startups offering software-only products that can be downloaded from online storefronts. While these entrants may offer sound products, they have helped stir questions in the minds of independent sales organizations and other acquirers, Grealish says. “There's a feel a lot of these folks are unproven,” he says. “It's a saturated market,” says Nick Holland, a senior analyst at Aite Group LLC who follows mobile payments. He agrees that the proliferation of applications from outside the card industry, especially those that don't feature hardware like card swipers, poses potentially more risk. “There's a lot that frankly seem like science projects,” he says. “That would be my criterion of trust, if there's hardware involved.” Reston, Va.-based TNS, which is collaborating with Blue Bamboo, a terminal vendor based in Shanghai, China, on its smart-phone offering, plans to market the product primarily through ISOs and other resellers, Grealish says. Available mid-May, the offering will feature a downloadable application and a device from Blue Bamboo that will read magnetic stripes and print receipts, though merchants will also be able to e-mail receipts to customers. The ability to swipe cards will let merchants avoid higher card-not-present interchange rates, Grealish argues. The device will link either by serial connections or Bluetooth to the phone, though Travis Lee, director of product marketing at TNS, says most will link wirelessly via Bluetooth. To start with, the app will work on handsets from Research in Motion's BlackBerry line, Motorola, and Nokia, though Grealish and Lee say TNS is working with Blue Bamboo on a version for Apple Inc.'s popular iPhone device. In the background, transactions will be managed by TNS's Synapse gateway, which ISOs and other acquirers have used for years for access to back-end processors from dedicated wireless POS terminals. TNS hopes ISOs will arm themselves with the smart-phone offering as a means of reaching businesses that want to accept credit and debit cards rather than checks but don't want to buy or lease dedicated wireless terminals. “This is going to be attractive to a group [ISOs] couldn't get to before,” says Grealish. TNS will price the offering at under $10 per month per device for access to Synapse. The app-and-hardware bundle will cost approximately $200 per handset. ISOs and other resellers will then remarket that pricing to their merchant clients. That pricing could be tricky, says Aite's Holland. He points to the falling prices of smart phones. The fee for the app and hardware, he says, could “double the price of the smart phone.”
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